MANAGEMENT DISCUSSION AND ANALYSIS 1. Industry Outlook: Power cut position in Tamil Nadu resulted in lower production resulting in low recovery for your company. Decreasing exports, persistent inflation, frequency in the fluctuation of raw material prices continues to be the areas of concern. Nevertheless your company is taking all necessary steps to ensure that the financial performance for the year 2014-2015 is improved. 2. Opportunities: TUFS Scheme offers heavy investment opputunities for modernisation of textile industries which is expected to generate good potential for the industry. 3. Challenges: i) Improvement in international scenario to cause demand momentum. ii) Availability of good quality cotton Yarn at reasonable prices unaffected by any influence of cotton yarn exports. iii) High power cut in the state of Tamilnadu virtually resulting huge production loss. iv) Abnormal increase in the rate on interest by the lending banks. v) Apbrciation of quality of cotton fabric manufactured and remunerative prices for the same. vi) Disproportionate increase in weaving capacity and manufacturing of cotton fabric without focus to market demand. vii) Government policies. 4. Company Outlook: The Company has closed all bank guarantees after being returned by Customs and the land documents has been handed over to Catholic Syrian bank, Raja Street who is now the only banker. The Company has applied for more funds to be released by the bank as it is the sole bank so that the Company will have more funds to buy rawmaterials now. 5. Internal control, systems and adequacy: The company periodically reviews the adequency and effectiveness of control systems like business process, financi4al reporting and compliance with applicable laws. 6. Human Resources Development. Employer- Employee relations continued to remain cordial during the year. 7. Safety and Environment: The company ensures high safety and environmental standards in all its operation at all the units. Safety needs are continuously monitored and brventive actions are imitated through departmental safety committees consisting of plant staff and workmen. 8. Cautionary statement. Certain statement in this report on Management Discussion may be forwarded looking statements and which have been issued as required by applicable securities laws and regulations. There are several factors which would be beyond the control of Management and as such, may affect the actual results could be different from that envisaged. For & on behalf of the Board of Directors – Sd-Nidhi Gupta Managing Director Place: Coimbatore Date: 31.05.2014 |